Time Warner Cable Customers Lose MSG Over Licensing Spat

Because the two companies could not agree on how much money Time Warner Cable should pay MSG Networks to air its games, MSG has been pulled from Time Warner's lineup.

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In recent years, New Year's Eve battles between cable companies and content providers over licensing fees have become de rigueur, and 2011 was no exception.

This year's fight is between Time Warner Cable and MSG Networks, which provides coverage of the Knicks, Rangers, Devils, and Islanders to Time Warner's New York metro area customers. But because the two companies could not agree on how much money Time Warner should pay MSG to air those games, MSG has been pulled from Time Warner's cable lineup.

Both sides continue to negotiate behind closed doors. Online, however, Time Warner and MSG have taken to specially crafted Web sites and Twitter feeds to blame the other for the outage.

MSG demanded "a 53 percent price increase for their programming, which just doesn't make sense," TWC said in a statement.

Michael Blair, president of MSG Media, said via keepmsg.com that the company has been trying to reach a workable solution with TWC for years.

"All we have asked is for Time Warner Cable to value our programming in the same way as other TV providersnothing more, nothing less," Blair said. "Unfortunately, they rejected every offer we made to them for almost two years. In the end, they were simply not interested in conducting serious negotiations on behalf of their customers and instead spent their time grossly mischaracterizing our positions to the public."

A message on MSG's Web site urges customers to drop Time Warner Cable and switch to another provider, but for many in the New York City area, Time Warner Cable is their only viable option.

TWC said it will still provide access to 40 percent of the season's remaining Knicks' games, 30 percent of Rangers' games, and 20 percent of Sabres' games via other channels, as well as "most" NBA and NHL playoffs. Twenty-three of the Knicks' games after Jan. 1, for example, will be carried on ABC, ESPN, TNT, or YES.

In the meantime, however, TWC said it will provide customers with a free, month-long preview of the Time Warner Cable Sports Pass, which provides access to more than 15 sports channels and normally runs $5.95 per month. Viewers will also have free access to NBC League Pass until Jan. 8, and those in Western New York can watch YNN Hockey Tonight, a new nightly hockey show that starts at 11:15pm on Jan. 2.

"We think MSG is being unreasonableand unfair to fans," TWC said.

The Time Warner vs. MSG battle is not an isolated incident. As Philip Napoli, a professor and department chair at Fordham University's Graduate School of Business, wrote in a recent editorial for The Hill, there were blackouts in more than 30 markets in 2011.

"Earlier this year, one broadcaster even pulled the plug on a local station in the Gulf Coast, depriving viewers of critical news and weather updates as Tropical Storm Lee approached thousands of homes," Napoli wrote. "These tactics raise significant questions as to whether the public interest is actually being considered and served."

Those types of details prompted the Federal Communications Commission to announce in December 2010 that it would investigate whether it could broaden its authority on this issue without involving itself too much in private negotiations. In March, it adopted a rulemaking that sought input on how it might best step in to the issue, known in DC-speak as retransmission consent. The commission has not yet made any official moves, but a December media ownership rulemaking included questions about retransmission consent, according to TVNewsCheck.

The FCC is not generally authorized to participate in discussions between television stations and cable systems regarding retransmission consent agreements. Furthermore, the FCC cannot tell a cable operator which stations or program services to delete in order to comply with the must-carry requirement.

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships at NBC's Meet the Press, washingtonpost.com, the Tate Gallery press office in London, Roll Call, and Congressional Quarterly. She graduated with a bachelor's degree in journalism from American University...
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